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backAMERItalk June, 2012

Supply Chain News: MIT, SCDigest Announce Major Research Project on US Manufacturing, Reshoring

Survey on Overall Trends in US Manufacturing with a Special Focus on Whether the ReShoring Phenomenon is Real will Provide Important Insight into US Economy, Government Policy.

There has been much anecdotal evidence and some more objective data that suggests there could be a reduction in offshoring to low cost countries, especially of course China.

It is clear, for example, that wages are rising substantially in China, a trend that seems likely to continue. That makes US costs, which are rising less quickly (indeed, they have recently been flat) increasingly competitive.

In fact, a study by Boston Consulting Group in 2011 found that the most expensive (Eastern) regions of China would see costs about on par with the least expensive regions of the US by the end of 2015, given wage rates and expected productivity levels. (See New Study from Boston Consulting Finds China Manufacturing Cost Advantage Over US to Disappear by 2015.)

How this plays out is not only of importance for supply chain and sourcing related decisions, but of course for the larger US economy and employment levels as well. Studies have found that every job in manufacturing creates something like seven additional jobs in suppliers, supports services, etc., so the stakes are huge.

Manufacturing has in fact been a bright spot in an otherwise very soft recovery in the US - but is that going to continue? Is the "reshoring" trend real, or more the product of wishful thinking? What are the barriers to keeping manufacturing in the US, and what government policies could make a difference in US manufacturing success?

These are among the critical questions that the Massachusetts Institute of Technology (MIT) is trying to answer in a major new research study on the future of US manufacturing, with a special focus on reshoring. MIT has decided to partner exclusively with SCDigest on the effort.

That incudes a survey effort that we are asking SCDigest readers to participate in. We know everyone is surveyed enough, but we believe this is an extra important one, not only for its supply chain aspects, but for its role in understanding in what direction US manufacturing is likely to take, and what changes are needed to foster US manufacturing strength and more reshoring. MIT has in fact been working with the US government on the study's objectives, especially the Advanced Manufacturing Partnership, and to design a survey that will provide actionable intelligence on this critical issues.

To take the brief survey, please go to US Manufacturing and Reshoring Survey. We would really appreciate your help. Below, you will find a brief video discussion between SCDigest editor Dan Gilmore and Dr. Bill Killingsworth of MIT and who leads MIT Forum for Supply Chain Innovation, on the goals and importance of this research. Dr. David Simchi-Levi of MIT is also a key member of the research team.

Watch MIT's Dr. Bill Killingsworth Discuss the Goals and Importance of this New Research Effort.

Watch video, please click here.

Source: SupplyChainDigest - GAI

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